In their winter forecast dated December 15, 2021, experts at the Kiel Institute for the World Economy (IfW Kiel) expect global gross domestic product (GDP) to increase by 4.5% in 2022, following growth of 5.7% in 2021. This development is based on the assumption that the recovery of the global economy will be temporarily dampened by the COVID-19 pandemic and persistent supply bottlenecks. However, the experts at IfW Kiel also expect the influence of these negative effects to diminish in 2022 and to be gradually overcome. There is significant uncertainty about the impact of the new Omicron variant on the economy. However, the economic impact is likely to diminish over time, as either vaccination rates are high or a significant proportion of the population has already come into contact with the virus, thus limiting the health impact. The supply bottlenecks have proven to be an increasingly strong burdening factor in recent months, but should gradually be overcome in the course of 2022 with the increasing adjustment of production capacities and value chains.
Provided that the continued course of the COVID-19 pandemic does not result in a renewed significant negative impact on the macroeconomic conditions, we expect the sporting goods industry to grow in 2022. We expect demand for sporting goods to increase in 2022 as the trend toward increased sports activities and healthier lifestyles continues and becomes even more significant as a result of the COVID-19 pandemic. This applies equally to the increasing popularity of athletic footwear and leisure/athletic apparel as an integral part of everyday fashion ("athleisure"). We also assume that major sporting events in 2022, such as the Olympic Winter Games in Beijing and the World Cup in Qatar, will help to support growth in the sporting goods industry.
In the financial year 2021, PUMA recorded a very strong sales and operating result (EBIT) growth due to a positive general development in our sector, a continued brand momentum of PUMA and strong global demand for our products as well as our focus on operational flexibility. Both, sales and operating result (EBIT) are the highest PUMA has ever achieved in its history.
Despite the very strong growth in 2021, we continue to face a high degree of uncertainty in our global business environment. The year 2022 has started with an all-time high of COVID-19 cases and consequently, several governments have implemented regional or country-wide restrictions which affect our entire value chain from manufacturing to retail store operations. Political tensions in key markets as well as supply chain constraints due to container shortages and port congestion are also unfortunately continuing in the new year.
Despite the uncertainties lasting into 2022, we expect a strong currency-adjusted sales growth of at least ten percent in the financial year 2022. We anticipate our operating result (EBIT) to be in a range of € 600 million and € 700 million (2021: € 557 million) and net earnings to improve correspondingly. The development of our gross profit margin and our OPEX-ratio in 2022 will continue to depend highly on the degree and duration of the negative impact of the COVID-19 pandemic on our sales. While we will continue to focus on our growth momentum by servicing our retail partners and consumers in the best possible way, we expect inflationary pressure from higher freight rates and raw material prices, in addition to the operating inefficiencies due to COVID-19, to have a dilutive effect on our profitability in 2022.
The achievement of this outlook is subject to continued manufacturing operations in our key sourcing countries in Asia and no major business interruptions due to COVID-19. In line with the previous years, PUMA will continue to maneuver through these challenges by building on its brand momentum, strong partnerships with suppliers and retailers as well as operational flexibility. The strong and profitable growth in the financial year 2021, an exciting product line up as well as very good feedback from retailers and consumers make us confident for the mid-term success and growth of PUMA.
Investments in fixed assets of around € 220 million are planned for 2022. The majority of these investments will be in infrastructure in order to create the operating conditions required for the planned long-term growth. The investments mainly concern own distribution and logistics centers and further investments in the expansion and modernization of the Group’s own retail stores.
The Management Board and the Supervisory Board have set long-term strategic priorities. Action plans are being implemented in a targeted and value-oriented manner. We believe that the corporate strategy “Forever Faster” provides the basis for mid- and long-term positive development.
Herzogenaurach, February 1, 2022
The Management Board
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